News Release from Titan International, Inc.
October 29, 2007 TITAN REPORTS 25% INCREASE IN THIRD QUARTER SALES QUINCY, Ill.—
Third quarter and
year-to-date highlights:
-
Sales
for third quarter 2007 were an all-time record of $195.5 million, up 25 percent,
as compared to $156.1 million in the third quarter of 2006.
-
Year-to-date
sales were an all-time record of $632.1 million, a 23 percent increase from
$513.9 million for the nine-month period in 2006.
-
Gross
profit was $18.3 million for the third quarter, a 7 percent increase from $17.1
million in the third quarter of 2006.
-
Titan's
quarter-ending cash balance of $55.3 million is an increase of 66 percent over
the December 31, 2006, balance of $33.4 million.
-
Titan's
stockholders' equity ended the third quarter at $300.4 million, a rise of
$113.3 million, or 61 percent, from the 2006 year-end balance of $187.2
million.
Statement of Chief Executive
Officer:
"The agricultural market for wheels and tires is
finally starting to show the growth we've been waiting for since 2006," said
Titan Chairman and CEO Maurice M. Taylor Jr. "The orders for wheels and tires
are as strong as we've seen since 2004, and we believe it could continue to
grow not only through 2008, but also into 2009 and beyond.
"The OTR mining tire business remains strong. Since
Titan announced the decision to build super giant 57- and 63-inch tires, almost
every mining company in the top 30 has made plant visits to Titan and found
that we will be able to supply them with both wheels and tires for all
equipment they use in open-pit or underground mining. This should add
tremendous volume going forward for Titan.
"The team of engineers that Chief Operating Officer
Ernie Rodia has put together is an impressive group. Rodia headed Goodyear's
Global Engineering and Manufacturing Technology team for five years before his
retirement from Goodyear in December 2003. He has given this group a boost in
energy; I've nicknamed them the gray haired band. To support this group we've
added 10 young engineers," said Taylor. "Titan's plan is to install a 24-foot
bull wheel, to be used for testing the 63-inch tire, by January 2008. This bull
wheel will have load capacity of 500,000 pounds at 42 miles per hour. The first
63-inch tire should be built by February 15, 2008, and samples by March 2008.
Production will start in second quarter 2008, and all other giant radials will
be phased in during that time.
"Titan should be finishing OTR conversion at the
Freeport plant during fourth quarter this year. Expansion is underway at Titan
Tire in Bryan, Ohio, with the construction of an approximately
250,000-square-foot addition. This project will add jobs to the area, and allow
us to produce as many as 6,000 giant tires per year.
"Third
quarter sales were great and with previously announced price increases, we
expect operating profit margins to improve going forward."
Financial overview:
Titan
International, Inc.'s net sales of $195.5 million for the third quarter of 2007
were 25 percent higher than third quarter 2006 sales of $156.1 million. Net
sales for the nine months ended September 30, 2007, were $632.1 million, up
from $513.9 million recorded in 2006, a 23 percent increase.
Gross
profit for the third quarter of 2007 was $18.3 million, as compared to $17.1 million
in the third quarter of 2006. Year-to-date gross profit was $72.8 million for
2007, as compared to $70.6 million for 2006.
Income from operations for the third quarter of 2007 was
$2.7 million, as compared to $4.7 million in the third quarter of 2006.
Year-to-date income from operations was $30.2 million in 2007, compared to
$33.7 million in 2006.
Loss
before taxes for the third quarter of 2007 was $(0.8) million, as compared to
income before taxes of $0.8 million in 2006. Year-to-date income before taxes
totaled $4.7 million in 2007, as compared to $24.5 million in 2006. The
year-to-date total for 2007 included a $13.4 million noncash convertible debt
conversion charge.
Income
taxes of $0.1 million were recorded for the third quarter of 2007, compared to
$0.3 million in 2006. Year-to-date, income tax expense was $3.1 million for the
nine months ended September 30, 2007, compared to $9.8 million in 2006.
Net
loss was $(0.9) million for the third quarter of 2007, compared to net income
of $0.5 million in third quarter 2006. Year-to-date, net income was $1.6
million in 2007 and $14.7 million year-to-date in 2006.
For
third quarter 2007, basic loss per share was $(.03), compared to $.02 at
September 30, 2006. Year-to-date basic earnings per share were $.06, compared
to $.75 year-to-date 2006.
Diluted loss per share was $(.03) for the third quarter
of 2007 compared to earnings per share of $.02 in 2006. Year-to-date diluted
earnings per share were $.06 for 2007 and $.65 for 2006.
Titan's quarter-end cash was $55.3 million at September
30, 2007, an increase of nearly $22 million from $33.4 million at year-end
2006. Long-term debt was $200 million, decreasing from $291.3 million at
year-end 2006.
The
company's stockholders' equity increased $113.3 million in the nine months
ended September 30, 2007. Titan's equity balance reached $300.4 million at
September 30, 2007, a significant increase from the $187.2 million at December
31, 2006.
Giant OTR mining tires
expansion:
In
May 2007, Titan's Board of Directors approved funding for the company to
increase giant OTR (off-the-road) mining tire production capacity to include
57- and 63-inch giant radial tires. This funding should allow Titan to produce
up to an estimated 6,000 giant radial tires a year. Titan estimates this may
increase sales as much as $240 million. Titan currently plans to be in start-up
production of these giant mining tires by the end of the second quarter 2008.
Form 10-Q:
For
additional information and Management's Discussion and Analysis of Financial
Condition and Results of Operations, see the company's Form 10-Q to be filed
with the Securities and Exchange Commission on October 29, 2007.
Safe harbor statement:
This
press release includes forward-looking statements that involve risks and
uncertainties, including risks as detailed in Titan International, Inc.'s
periodic filings with the Securities and Exchange Commission, including the
annual report on Form 10-K for the year ended December 31, 2006. The company
cautions that any forward-looking statements included in this press release are
subject to a number of risks and uncertainties and the company undertakes no
obligation to publicly update or revise any forward-looking statements.
Company description:
QUINCY,
Ill.-Titan International, Inc. (NYSE: TWI), a holding company, owns
subsidiaries that supply wheels, tires and assemblies for off-highway equipment
used in agricultural, earthmoving/construction and consumer (including all
terrain vehicles) applications
Titan International, Inc.
Consolidated Condensed
Statements of Operations (Unaudited)
For
the three and nine months ended September 30, 2007 and 2006
|
Amounts in thousands except
earnings per share data.
|
|
|
|
|
Three Months Ended
|
Nine Months Ended
|
|
|
September 30,
|
September 30,
|
|
|
2007
|
2006
|
2007
|
2006
|
|
Net sales
|
$195,472
|
$156,120
|
$632,083
|
$513,891
|
|
Cost of sales
|
177,178
|
139,040
|
559,287
|
443,255
|
|
Gross
profit
|
18,294
|
17,080
|
72,796
|
70,636
|
|
|
|
|
|
|
|
Selling, general & administrative expenses
|
14,123
|
11,260
|
38,090
|
33,034
|
|
Royalty expense
|
1,474
|
1,113
|
4,490
|
3,952
|
|
Income
from operations
|
2,697
|
4,707
|
30,216
|
33,650
|
|
|
|
|
|
|
|
Interest expense
|
(4,472)
|
(4,565)
|
(14,651)
|
(11,997)
|
|
Noncash convertible debt conversion charge
|
0
|
0
|
(13,376)
|
0
|
|
Other income
|
975
|
671
|
2,521
|
2,820
|
|
(Loss)
income before income taxes
|
(800)
|
813
|
4,710
|
24,473
|
|
|
|
|
|
|
|
Provision for income taxes
|
78
|
325
|
3,109
|
9,789
|
|
|
|
|
|
|
|
Net
(loss) income
|
$(878)
|
$488
|
$1,601
|
$14,684
|
|
|
|
|
|
|
|
Earnings per common share:
|
|
|
|
|
|
Basic
|
$(.03)
|
$.02
|
$.06
|
$.75
|
|
Diluted
|
(.03)
|
.02
|
.06
|
.65
|
|
|
|
|
|
|
|
Average common shares outstanding:
|
|
|
|
|
|
Basic
|
27,311
|
19,731
|
25,137
|
19,670
|
|
Diluted
|
27,311
|
20,060
|
25,591
|
26,027
|
Segment
Information
Revenues
from external customers (Unaudited)
|
Amounts in thousands
|
|
|
|
|
Three Months Ended
|
Nine Months Ended
|
|
|
September 30,
|
September 30,
|
|
|
2007
|
2006
|
2007
|
2006
|
|
Agricultural
|
$118,530
|
$89,014
|
$377,930
|
$329,708
|
|
Earthmoving/Construction
|
69,431
|
56,683
|
216,891
|
117,489
|
|
Consumer
|
7,511
|
10,423
|
37,262
|
66,694
|
|
Total
|
$195,472
|
$156,120
|
$632,083
|
$513,891
|
Titan International, Inc.
Consolidated
Condensed Balance Sheets (Unaudited)
|
Amounts in thousands
|
|
|
| |
September 30,
|
December 31,
|
|
Assets
|
2007
|
2006
|
|
Current
assets:
|
|
|
|
Cash
and cash equivalents
|
$55,337
|
$33,412
|
|
Accounts
receivable
|
117,459
|
73,882
|
|
Inventories
|
132,553
|
154,604
|
|
Deferred
income taxes
|
27,699
|
29,234
|
|
Prepaid
and other current assets
|
20,684
|
18,801
|
|
Total
current assets
|
353,732
|
309,933
|
|
|
|
|
|
Property,
plant and equipment, net
|
185,490
|
184,616
|
|
Investment
in Titan Europe Plc
|
63,140
|
65,881
|
|
Goodwill
|
11,702
|
11,702
|
|
Other
assets
|
16,598
|
12,994
|
|
Total
assets
|
$630,662
|
$585,126
|
|
|
|
|
|
Liabilities & stockholders'
equity
|
|
|
|
Current
liabilities:
|
|
|
|
Short-term
debt
|
$0
|
$98
|
|
Accounts
payable
|
54,646
|
25,884
|
|
Other
current liabilities
|
36,858
|
36,942
|
|
Total
current liabilities
|
91,504
|
62,924
|
|
|
|
|
|
Long-term
debt
|
200,000
|
291,266
|
|
Deferred
income taxes
|
25,650
|
27,924
|
|
Other
long-term liabilities
|
13,068
|
15,835
|
|
Stockholders'
equity
|
300,440
|
187,177
|
|
Total
liabilities & stockholders' equity
|
$630,662
|
$585,126
|
Conference call information Contact: Courtney Leeser
Communications Coordinator
(217) 221-4489 |
